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Financial corporate profits reached 41% of all corporate profits in 2007 in the U.S. In 1964 they were 2% of all corporate profits. (According to Wm Tabb in Restructuring Capitalism in Our Time, page 14) Tabb analyzes the problem in these sentences:
"Financial returns exceeding the rate of profit in the real economy can be realized over an extended period only if finance increases efficiency so that discounted future earnings increase. If, as is more often the case, profits are achieved by short-term expedients: squeezing wages, [squeezing] the prices received by suppliers, [squeezing] research and development expenditures, and the sale of company assets, the rate of economic growth outside of finance slows. In a basic sense these sources of financial profits come as an appropriation from the rest of the economy." It's a transfer of wealth that leaves the entire society less well off. Charles St. Pierre has it right. My blog http://benL8.blogspot.com

As for government being co-opted: Gutting regulations and regulatory agencies like the SEC and IRS. Slaps on the wrist for major crimes, and even then not against the people involved, but only the institutions. 'Incompetent' prosecutions of individuals. Allowing statutes of limitations to lapse. Allowing TBTF institutions to continue. Elected officials taking big campaign money from bankers.

Then there is the revolving door between regulators and the institutions they regulate.

Finance's crisis of legitimacy can only worsen. To big to fail means to big to legitimately succeed. Bankers must use fraud, duplicity, and theft to maintain the bottom lines of institutions which are simply too big to function in a socially useful way. They must act in ways which are economically and socially destructive. No longer do they perform their proper task of the useful allocation of society’s resources, but instead suck those resources into the maw of their own consumption.

Their co-opting of governments is a necessity of these institutions' survival. Thus they compromise the legitimacy of any government which helps to sustain them. That government becomes instrumental to the harm the financial sector inflicts on its citizens.

Here's one particular: Just yesterday, Morgan Stanley agreed to pay the govt $4.8 mil, on a deal they made $21 mil. Demonstrates all my points. http://dealbook.nytimes.com/2012/08/07/federal-judge-grudgingly-approves-morgan-stanley-price-fixing-case/?ref=todayspaper Total penalties were $16.8 mil, on a deal that price fixed electric rates and cost the public $300 mil. See above comment for things you can Google.

Quite possibly during the US presidential campaign, the Obama campaign will re-position Mitt Romney as the face of Big Finance and Big Banks. This is the logical place to go after tax returns and offshore accounts.

An attack campaign against Big Bank Privilege could be highly effective since almost no voting block in the US likes big banks. Any Obama appeal based on "responsible bank regulation" should have broad appeal.

Internationally, top-tier political leaders are quite willing to through bankers under the bus because they understand they are one election away from being retired by the voters. And voters don't like bankers. There is a democratic simplicity to this.

And I suspect top political leaders are more than a little disgusted with having to bail these guys out with trillions in monetary expansion.

No doubt you know that the gov't actually made money on the bank bailout. The biggest cost to taxpayers, by far, will be Freddie and Fannie. And these were regualted directly by congress. So, it looks like regulation by the politicians is what is really expensive for the taxpayers.

In their book on the subject, entitled 13 Bankers, Johnson and Kwak recall Obama's early meeting with the major bank CEOs. "My administration is the only thing between you and the pitchforks," he said. And more revealingly, he added: "Help me help you."

Obama can excoriate Romney in the campaign, but that doesn't make him FDR. There is no proof he will stand against the banksters.